), the beleaguered mobile handset developer, has significantly
outperformed the Zacks Consensus Estimates in the fourth quarter
of 2012. The company improved its adjusted operating margin
attributable to better sales of the flagship Lumia series of
smartphones. Nokia currently has a Zacks Rank #1 (Strong
However, the company has given a weak financial outlook for
the first quarter of 2013 due to increased competition. The Board
of Directors has decided to propose suspension of annual dividend
payment for the first time in over 20 years to ensure adequate
Quarterly net revenue was approximately $10,614 million, down
20% year over year, surpassing the Zacks Consensus Estimate of
$10,352 million. Quarterly net profit was approximately $267
million or 5 cents per share compared to a net loss of $1 billion
or a loss of 38 cents per share in the prior-year quarter.
However, quarterly adjusted (excluding special items) earnings
per share of 8 cents were way ahead of the Zacks Consensus
Estimate of a break-even result.
Adjusted operating profit in the reported quarter was $838
million, up 33% year over year. Quarterly adjusted operating
margin was 7.9% compared to 4.8% in the year-ago quarter. During
the fourth quarter, the company generated $743 million, down 11%
year over year. At the end of fiscal 2012, Nokia had
approximately $5,755 million of cash and cash equivalents
compared with $13,641 million at the end of fiscal 2011.
Devices & Services Segment
Quarterly total revenue was approximately $5,087 million, down
36% year over year. Within this segment, Smartdevices (including
smartphones and tablets) revenue was $1,617 million, down 55%
year over year. Mobile Phone revenue was $3,258 million, down 19%
year over year.
Other revenue was $213 million, down 20% year over year.
Smartdevices average selling price (ASP) was $246, up 33% year
over year. Mobile Phone ASP was $41, down 3% year over year.
In the fourth quarter of 2012, Nokia shipped 6.6 million
Smartdevices (including 4.4 million Lumia-series phones and 2.2
million Symbian smartphones) and 79.6 million Mobile Phones
(including 9.3 million Asha full touch phones), down 66% year
over year and 15% year over year, respectively.
Nokia Siemens Network Segment
Quarterly net revenue was approximately $5,264 million, up 5%
year over year. Quarterly adjusted operating profit was
approximately $1,113 million, down 11% year over year. However,
adjusted operating margin was 14.4% compared with 4.6% in the
Location & Commerce Segment
Quarterly net revenue was approximately $367 million, down 9%
year over year. Quarterly adjusted gross margin was 82% compared
with 77.8% in the year-ago quarter. Adjusted operating margin was
14.4% compared with 9.5% in the year-ago quarter.
For the first quarter of 2013, Nokia expects its Devices &
Services operating margin to be approximately negative 2%, plus
or minus 4%. However, Nokia Siemens Networks segment operating
margin is expected to be 3%, plus or minus 4%. Nokia further
expects to reduce the operating expense in this segment by more
than €1 billion by 2013 from the 2010 level of €5.35 billion.
Other Stocks to Consider
Other stocks to consider in the mobile handset market are
Research In Motion Ltd.
). While net earnings of Apple just managed to beat the Zacks
Consensus Estimate in the most recent quarter, Research In Motion
and Google both handily beat the Zacks Consensus Estimate. All
these three stocks currently have a Zacks Rank #3 (Hold).
APPLE INC (AAPL): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis
NOKIA CP-ADR A (NOK): Free Stock Analysis
RESEARCH IN MOT (RIMM): Free Stock Analysis
To read this article on Zacks.com click here.